News / Asia

China Hits Back at EU Wine Over Solar Panel Duties

Participants taste Italian Chianti Classico wine at a food expo in Guangzhou, Guangdong province, June 4, 2013.
Participants taste Italian Chianti Classico wine at a food expo in Guangzhou, Guangdong province, June 4, 2013.
Reuters
China took aim on Wednesday at exports of the European wines favored by its growing middle class, responding to an EU move to impose anti-dumping duties of Chinese solar panels as tensions rise between two of the world's biggest trade partners.

In a step targeting southern European states such as France and Italy that back duties but largely sparing northern countries such as Germany that oppose them, Beijing launched an anti-dumping and anti-subsidy inquiry into sales of European wine.

The European Union will impose duties on imports of Chinese solar panels from Thursday, but has dramatically reduced the initial rate after pressure from some large member states led by Berlin in the hope of negotiating a settlement with Beijing.

China's Commerce Ministry said the EU penalties were imposed despite Beijing making great efforts and showing enormous sincerity in trying to resolve the matter through talks.

“The European side still obstinately imposed unfair duties on Chinese imports of solar panels,” the ministry said in a statement on its website (www.mofcom.gov.cn).

China's newly well-to-do, whose ranks are growing as fast as the economy, have a seemingly unquenchable thirst for European wines, especially those from France which make up more than half the total. China is now the biggest importer of Bordeaux wines where consumption soared 110 percent in 2011 alone.

France's trade ministry condemned the Chinese move as “inappropriate and reprehensible”, accusing Beijing of opening a new front in an unrelated area. French President Francois Hollande called for a meeting of the 27 EU member states to show solidarity on trade issues, a government spokeswoman said.

In a more cautious reaction, German Economics Minister Philipp Roesler renewed Berlin's call for a negotiated solution and warned of the danger of wider trade confrontation.

Any action is unlikely to be popular with Chinese consumers. “We Chinese love the French wines. They're so sophisticated and go down so well,” said Niu Lanxiang, 23, a logistics worker out shopping for wine in a supermarket in Beijing's fashionable Sanlitun district.

“I know wine is more of a Western habit, but China is a modern country now too and we're learning how to enjoy wine,” she said. However, not all Chinese share her cultured palate; some still prefer to drink wine mixed with Coca-Cola or Sprite.

A European Commission spokesman told a briefing there was no dumping or subsidy of European wine exports to China and the EU authorities would defend their producers. He declined comment on talk of a trade war, saying Brussels did not use such terms.

The Chinese ministry said the government had begun the inquiry into EU wines at the request of Chinese wine makers.

“The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies,” it said in a statement.

“We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law.”

The move appeared largely symbolic and less severe than if China had targeted industrial exports such as Airbus aircraft, made by Toulouse-based European aerospace group EADS.

“It's a very calculated move. Wine is significant enough as a signal, yet it's not important enough to hurt industries in the European Union,” said Xu Bin, professor of economics and finance at the China Europe International Business School in Shanghai.

China's “underlying interests” were very much in favor of resolving the solar panel issue within the next two months without over-reacting, he said. “Neither side wants to see a trade war, but both sides have their own interests.”

France hit hardest

EU wine exports to China excluding Hong Kong, which EU officials said was not covered by the announcement, reached 257.3 million liters in 2012 for a value of nearly $1 billion. More than half - 139.5 million liters - came from France.

Diageo and Pernod are among the suppliers.

European wine-growers receive subsidies from the EU's Common Agricultural Policy, although not specifically for exports. For example, the biggest producer of Beaujolais wines, George Duboeuf, received 1.1 million euros ($1.4 million) in EU handouts in the 2011/12 season, according to the French Agriculture Ministry.

China is the third biggest export market for European wines and the fastest growing, as the rising middle class enjoys the pleasures and status of sipping fine Bordeaux or quaffing Rioja.

About 15 Chinese individuals or businesses have bought wine-growing properties in Bordeaux and investors also want to develop luxury tourism in the region, which they think will be the next fad as Chinese wealth pours into Europe.

Jim Boyce, who runs the wine blog grapewallofchina.com, said Chinese manufacturers have been upset about alleged dumping for a while. “The big issue was all this Spanish wine flowing in here at incredibly low prices,” he said.

In Madrid, a representative of the Spanish Wine Federation said the Chinese move was a potentially serious blow to one of the few bright spots in a country stuck in deep recession since a housing bubble burst in 2008, decimating its economy.

“The saddest thing about all this is that if proceedings are opened and anti-dumping measures such as import tariffs applied, it means a sector that is doing really well will be dragged into a trade war that has nothing to do with it,” she said.

Spain abstained on the solar panel duties. Under EU rules that is counted as a vote in favor.

The EU is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the bloc totaled 290 billion euros ($376 billion) last year, with 144 billion euros going the other way.

Wine sales are only a fraction of overall exports to the rising Asian economic powerhouse but the move raises the risk of more tit-for-tat trade barriers.

The EU now has 31 trade investigations underway, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers.

The EU says it has evidence that Chinese firms are selling solar panels below cost - a practice known as dumping. But the initial duty of 11.8 percent announced on Tuesday by European Trade Commissioner Karel De Gucht was far below the average 47 percent that had been planned.

The Chinese Commerce Ministry said it took note of the lower initial rate and called on the EU to “show more sincerity and flexibility to find a resolution both sides can accept through consultations.”

You May Like

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine May Be in Use by Jan.

WHO assistant director Dr. Marie Paule Kieny says clinical trials of Ebola vaccines are underway or planned in Europe, US and Africa More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid